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Category: Taxation

Pakistan Revenue delivers the latest taxation news, covering income tax, sales tax, and customs duty. Stay updated with insights on tax policies, regulations, and financial developments in Pakistan.

  • MCC Appraisement East announces auction of trucks

    MCC Appraisement East announces auction of trucks

    KARACHI: Model Customs Collectorate (MCC) Appraisement East has announced auction of dump trucks and other heavy construction machinery on June 10, 2019 at East Wharf Karachi.

    Following machinery will be presented for auction:

    01. OLD AND USED ASPHALT PAVER, MODEL:PE-150B, ENGINE NO. BC0206, SERIAL NO. 76857, I/O. AND BRAND NOT SHOWN, WEIGHT: 5 MT. 1 UNIT

    02. OLD AND USED DOUBLE CABIN NISSAN TADANO CRANE, SERIAL NO. KG45S-00419, BRAND: NISSAN, I.O. NOT SHOWN, CAPACITY: 30 MT, WEIGHT: 17 MT 1 UNIT

    03. USED HONDA INSIGHT CAR, CH NO. ZE2-1308052, MODEL: 2011 1 UNIT

    04. OLD AND USED ROLLER MACHINE LONGWITH STANDARD ACCESSORIES, TYPE: CA255, SERIAL NO. *10100154LHE004719*1217, I/O. INDIA, MFG YEAR 12/2017, BRAND: DYNAPAC., WEIGHT: 13.22 MT 1 UNIT

    05. OLD AND USED ROLLER MACHINE LONGWITH STANDARD ACCESSORIES, TYPE: CA255, SERIAL NO. *10100154CHE004036*03117, I/O. INDIA, MFG YEAR 03/2017, BRAND: ATLAS COPCO., WEIGHT; 13.25 MT 1 UNIT

    06. USED LOADER WITH ARM, BOOM AND BUCKET, CH.NO.81K03165, ENGINE NO.N/S. MFG YEAR.N/S. IN BURNED FORM., WEIGHT: 15.55 MT (BURNED) 1 UNIT

    07. USED WHEEL LOADER WITH ARM, BOOM AND BUCKET, CH.NO.311R01700, ENGINE NO.N/S. MFG YEAR.N/S. IN BURNED FORM. WEIGHT: 12 MT (BURNED) 1 UNIT

    08. USED HITACHI EXCAVATOR IN BURNED FORM CH NO.N/S. ENGINE:N/S, WEIGHT; 15.500 MT (BURNED) 1 UNIT

    09. WHEEL LOADER IN BURNED FORM, CH NO.63R05550, ENGINE N/S. MFG YEAR N/S. ,WEIGHT: 11 MT ((BURNED) 1 UNIT

    10. USED ROAD ROLLER IN BURNED FORM CH NO. N/S. ENGINE NO. N/S., WEIGHT: 7.5 MT (BURNED) 1 UNIT

    11. CAT. WHEEL LOADER WITH BOOM ARM BUCKET, CH.NO. 22Z03317, ENGINE NO.N/S. IN BURNED FORM., WEIGHT: 11 MT (BURNED) 1 UNIT

    12. OLD AND USED HONDA FIT+HYBRID CAR. CH NO. GP5-1212997, TYPE: DAA-GP5 1 UNIT

    13. HOT ROLLED STEEL SHEETS IN COILS OF SECONDARY QUALITY, WEIGHT: 793 MT 36 COILS TP 10-13

    14. OLD AND USED VOLVO DUP TRUCK CHA.NO.YV2JS32G99A687488 MODEL. N/S. BRAND VOLVO, ORIGIN NOT SHOW 1 UNIT

    15. USED TOYOTA COASTER, AUTOMATIC, DIESEL, CH#.xzb50-0059570, MODEL: SKG-XZB50-ZXTEY, MFG YEAR 20185 1 UNIT

    16. USED MERCEDEZ CONCRETE PUMP, VIN#WDB6251371K11311, MODEL: SCHWINGS42SXG, ORIGING: GERMANY. WEIGHT: 41 MT AS PER KPT B.BOOK. 1 UNIT

    17. USED TRUCK MOUNTED CONCRETE PUMP, CH#.KL3PC77CIVK001127 (ENGRAVED), BRAND: PUTZMEISTER, MODEL: DCP52, ORIGINAL NOT SHOW: TOTAL WEIGHT: 37.84 M.T. AS PER KPT B. BOOK. 1 UNIT

  • FBR suggested abolishing regulatory duty on import of phrma raw materials

    FBR suggested abolishing regulatory duty on import of phrma raw materials

    KARACHI: Federal Board of Revenue (FBR) has been suggested to abolish regulatory duty and reduce customs duty on import of raw materials by pharmaceutical industry.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020 said that through the Finance Act 2008, custom duty on pharmaceutical raw materials was reduced to five percent.

    However, there are still many items that are not included in the list of duty reduction.

    The OICCI recommended reduction in custom duty and abolishment of regulatory duty on pharma raw materials and packing materials.

    All pharmaceutical raw materials should be added to Table A of Part-II of Fifth Schedule to the Pakistan Customs Tariff, it further recommended.

    The OICCI pointed out another issued saying that as already highlighted in the Supreme Court Human Right Case No. 93336 of 2018, FBR to allow Sales Tax exemption for Goods defined in Medical Devices Rules – 2017 under DRAP Act, 2012 with their respective headings of Customs Act 1969 imported and locally manufactured.

    The OICCI recommended that a new Serial No.4A to be inserted in Part II of the First Schedule to reduce the rate of tax from 5.5 percent to 1 percent on import of pharmaceutical raw materials and finished goods for filers.

    It said that presently the rate of tax at import of pharma raw materials and finished goods is very high considering the price constraints on pharmaceutical products and significant devaluation of currency over past months.

    The pharma sector is highly dependent on import due to non-availability of raw materials and medicine in finished form in as local substitutes.

    The OICCI also suggested sales tax zero rating on pharmaceutical inputs. It said that sales tax being paid on packaging material utilities and other supplies used in manufacturing pharmaceutical products is adding to the product cost.

    Since the final product is exempt from Sales Tax, the tax paid can neither be passed on to the consumer nor can be claimed as input tax. This is also against the philosophy of sales tax which is supposed to be borne by the consumer.

    It recommended that local supply of medicines/drugs should be classified under Zero-rating, instead of the current “exempt” status from levy of sales tax, so that the pharma industry, whose selling prices are regulated by the government, may claim input tax credits on taxable inputs.

    “Alternatively, the taxable raw materials and packing materials, whether imported or locally procured may be notified as exempt from sales tax, if purchased by a pharma manufacturer.”

  • FBR advised to allow tax adjustment on telecom services

    FBR advised to allow tax adjustment on telecom services

    KARACHI: Federal Board of Revenue (FBR) has been urged to allow adjustment of withholding tax on services provided telecom sector.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in tax proposals for budget 2019/2020 recommended that the eight percent minimum tax regime should be withdrawn and should be made adjustable.

    The OICCI said that through Finance Act, 2016, an amendment was made in Section 153(1)(b) of the Income Tax Ordinance, 2001 whereby the 8 percent withholding tax deducted against the services provided by telecom companies, along with other service providers, have been subjected to a charge of minimum tax instead of adjustable regardless their actual income or loss.

    This tax has thus changed the character of income tax from a direct tax to an indirect tax as the amount of charge would no longer be applicable on the quantum of income actually earned even under the standard income tax rules.

    Furthermore, the exorbitant rate of 8 percent will seriously erode the profitability, or further increase the losses, of the telecommunication industry which according to independent reports is in shackles and is already the victim of discriminatory taxation.

    Consequent to the above amendment in the law, non-issuance of exemption certificates under Section 153(1)(b) on Income Tax Ordinance, 2001 of the Income Tax Ordinance, 2001 in view of the imposition of the minimum tax has also increased the administrative burden of both the telecommunication companies and the withholding tax monitoring units of FBR as the tax that was previously deposited lump-sum as advance tax is now being collected by thousands of corporate customers across Pakistan.

  • AFU Islamabad announces auction of confiscated goods on June 03

    AFU Islamabad announces auction of confiscated goods on June 03

    The Model Customs Collectorate (MCC) Air Freight Unit (AFU) in Islamabad has declared a public auction of confiscated goods, including a substantial quantity of LCD/LED Televisions.

    (more…)
  • FBR increases sales tax on petrol

    FBR increases sales tax on petrol

    ISLAMABAD: Federal Board of Revenue (FBR) has increased sales tax rate on petrol to 13 percent for the month of June 2019 from 12 percent, which was applicable in May 2019.

    The FBR issued SRO 603(I)/2019 dated May 31, 2019 and revised the sales tax rates on petroleum products effective from June 01, 2019.

    The sales tax on petrol has been increased to 13 percent from 12 percent.

    The sales tax rate on high speed diesel has been reduced to 13 percent from 17 percent.

    However, sales tax rates on kerosene oil and light diesel oil were kept unchanged at 17 percent.

    The government increased the prices of POL products for the month of June 2019, which are as follow: Petrol 108.42 increased to Rs112.68; High Speed Diesel 122.32 increased to Rs126.82; Kerosene (SKO) Rs96.77 to Rs98.46; and Light Diesel Oil (LDO) Rs86.94 to Rs88.62.

  • Customs unfolds bid to clear mobile phones on passengers’ stolen information

    Customs unfolds bid to clear mobile phones on passengers’ stolen information

    KARACHI: Pakistan Customs has unfolded a bid to steal the data of air travelers for the purpose of mobile phone registration with the Pakistan Telecommunication Authority (PTA).

    According to the details the customs staff posted Jinnah International Airport (JIAP), Karachi detained a person, who was fraudulently obtained data of air travelers including passport numbers for clearing mobile phones at customs stage and for clearing PTA restriction.

    As per regulations only PTA certified mobile phones are allowed to have active connection in Pakistan. In this regard passengers arriving from abroad are allowed to clear one mobile phone without payment of duty and taxes. However, more than one phone will attract levy.

    Details revealed that customs authorities recovered around 63 mobile phones from a passenger namely Muhammad Umar arriving from an international flight.

    The accused passenger entered details of passengers into the PTA system to get cleared the mobile phones without duty and taxes. The accused passenger managed to get clearance from the PTA for those 63 mobile phones.

    This was confirmed by Muhammad Faisal, Deputy Collector of Pakistan Custom.

    The customs official said that the authorities had lodged an FIR against the accused for smuggling cell phones and stealing information of passengers.

    Faisal said that the accused had indulged in clearing mobile phones by entering details of passengers including CNICs, flight number and passport numbers etc.

    The accused in his statement said that many travel agencies were involved in this scam.

    The customs official said that PTA had been requested to introduce bio-metric system for the clearance of mobile phones.

  • FBR requested to extend date for filing sales tax return

    FBR requested to extend date for filing sales tax return

    KARACHI: Federal Board of Revenue (FBR) has been urged to extend the date for filing monthly sales tax returns as public holidays announced by the government for Eid holidays coincide with the return filing due dates.

    A letter has been sent on Friday to FBR Chairman Syed Muhammad Shabbar Zaidi for urgent consideration and for extension of time for e-filing of sales tax annexure ‘C’ and sales tax returns for the tax period May 2019.

    The Pakistan Tax Bar Association (PTBA) in its letter to FBR chairman informed that the last date for e-filing of sales tax annexure ‘C’ of sales tax returns and filing of sales tax return for the month May 2019 is June 10, 2019 and June 15, 2019, respectively. However, due to Eid Holidays due from June 04 to June 08, 2019, all the business houses will remain closed.

    The PTBA further said that the first word day after Eid and weekly holidays shall be June 10, 2019 which will be the last day of filing of Annexure “C”. Therefore it would not be practically possible to submit annexure “C” and Sales Tax Return in time.

    In view of above, the PTBA requested to extend the last date of e-filling of Sales Tax annexure “C” and e-filling of sales tax return up to June 18, 2019 for the tax period May 2019 to facilitate the taxpayers to fulfill their legal obligations properly.

  • PTBA urges FBR to extend date for filing income tax returns

    PTBA urges FBR to extend date for filing income tax returns

    KARACHI: Pakistan Tax Bar Association (PTBA) on Saturday urged Federal Board of Revenue (FBR) to extend the last date for filing income tax returns for Tax Year 2018 up to June 30, 2019 considering the recently launched tax amnesty scheme.

    In a letter to FBR Chairman Syed Muhammad Shabbar Zaidi, the PTBA informed that the Asset Declaration Ordinance, 2019 was announced on May 16, 2019 and the last date for filing declaration is June 30, 2019.

    The PTBA urged the FBR chairman to extend the last date for filing of return of income and statement of final taxation for individuals, Association of Persons (AOPs) and companies (other than public limited companies quoted on stock exchange) to June 30, 2019.

    The last date was already extended by the FBR till April 30, 2019 through Circular No. 03/2019 dated March 31, 2019.

    The apex tax bar said that the extension would encourage the new taxpayers to bring their house in order and come into the mainstream of economic activities by availing the benefit to become active taxpayers.

  • Chemical merchants advocate FTR continuation for commercial importers

    Chemical merchants advocate FTR continuation for commercial importers

    KARACHI: Chemical merchants have strongly advocated continuation of Final Tax Regime (FTR) for commercial importers in the upcoming budget.

    In a statement issued on Saturday Shahid Vaseem, Chairman, Pakistan Chemicals & Dyes Merchants’ Association (PCDMA), said that because commercial importers pay 6 percent advance non-adjustable tax at import stage, whereas industrial importers of same raw material pay only 5.5 percent adjustable/refundable advance tax or avail tax exemption certificate facility, therefore it was not justified to withdraw Final Tax Regime (FTR) from Commercial importers without giving them options of claiming tax refund and facility for issuance of Tax exemption certificate if excess tax is already paid at import stage.

    In meeting with PCDMA memebers and leading importers of industrial Raw Materials, Chairman PCDMA, said that assessed value for calculation of customs levies of an industrial raw material whether it is imported by industrial importer or commercial importer; remains same either on the basis of valuation ruling (if available), international scan (if available) or custom data; therefore, chances of under-invoicing eliminated on import of industrial raw materials.

    Shahid Vaseem said in his opinion by imposing similar rate of sales tax on industrial raw materials will also eliminate the issue of imports by non-genuine industrial importers and excess imports by the genuine industrial importers, who just import big volumes of industrial raw materials to sale in market at huge profit due to less rate of tax and in some cases got extra ordinary benefits of various SROs. Which resulted in loss of billions of rupees to government revenue.

    Shahid Vaseem demanded the Government to provide a level-playing field for commercial importers who are importing industrial raw material and supply these essential raw materials to industries in SME segment. At import stage commercial importers are paying 17+3= 20 percent sales Tax as compared to 17 percent only, if same items are imported directly by industrial importers, this renders our customer industries in SME segment un-competitive in local as well as export markets, thereby eliminating job opportunities and hurting exports of value-added goods.

    He explained that 3 percent Additional Sales Tax on import of Industrial Raw Materials if imported by Commercial Importers is irrational and unjustified, because 3 percent ADDITIONAL Sales Tax can only be applied if the Value Addition on raw material is assumed 17.65 percent, which is not possible because there is no process of value addition involved and no inputs such as Land, Buildings, Machinery, Labor, Electricity and Gas etc. are used by commercial importers of same industrial raw materials.

    On the contrary the value addition by manufacturers is assumed as 10 percent only and the GST is charged at the rate of 1.7 percent despite all the above inputs.

    He claimed that by implementing same rate of taxes and extending benefits of various SROs to commercial importers, similar to the industrial importers of Raw materials for one year will result in significant drop in import volume by the industrial importers, which will prove the misuse of reduce tax facility by the industrial importers and will provide opportunity to the government to identify non-genuine industrial importers who are only existing for importing raw materials for commercial sales.

  • Ministry opposes suggestions to allow commercial import of used cars

    Ministry opposes suggestions to allow commercial import of used cars

    ISLAMABAD: The ministry of industries and production has opposed the suggestions to allow commercial import of used and old motor cars into Pakistan.

    In an office memorandum, the ministry said that a meeting was held earlier this month with the car dealers federation to analyse suggestions to devise import and re-export of used vehicles policy 2019/2029 wherein it was unanimously observed that the dealers were interested in commercial import of used/old cars.

    The ministry said that as for the investment plan of $3.2 billion, the same seems irrational as importers do not plan to build any manufacturing facilities in near future. The Engineering Development Board (EDB) has therefore opined that proposed plan will negatively affect existing OEMs, new entrants and auto part manufacturers.

    The ministry further said that it is important to consider that Auto Development Policy (ADP) 2016-2021 has attracted investment of more than $1.3 billion so far from foreign investors who are at various stages of setting up their projects.

    Under ADP 2016/2021, fifteen new investors have been granted Greenfield status and under Brownfield category two closed down units have been revived, the existing OEMs are enhancing their capacities, their production and other new entrants are expected to start their production/complete their manufacturing facilities shortly. As per business plans, few new entrants have planned to export as well.

    “In view of above, allowing commercial import for domestic market would be against the spirit of Automotive Development Policy 2016/2021, which was prepared in consultation with Board of Investment, FBR and Ministry of Commerce etc.”

    It is also pertinent to point out that import of used cars would be at odds with the relevent import policy provision, hence it is requested to reject the proposal.